Update on French Social Security Changes

Nick Saul, CEO of the BachmannHR Group attended the seminar held at the Monaco Yacht Club on the 17th May where presentations were given by representatives of the French Government in regard to the introduction of the new legislation from the 1st July 2017 on payment of French Social Insurance for marine crew domiciled in France.

Whilst the French Government should be applauded for working to introduce this legislation in compliance with the MLC, it was clear from what was discussed that whilst they were obviously keen on the new law, they had not thought through the whole process! Indeed in the Q&A session that took place after the presentations, was one where the most common answer to a question was that there wasn't one.

So what did we learn

They still intend to introduce the law on the 1st July 2017, unless a legal challenge to it which was also announced during the seminar, was successful.

There will be a requirement for all marine crew domiciled in France to pay into the new French Enim system or into another EU state operated social security system or one of a country that has a reciprocal Social Insurance System with France (these include the USA and Guernsey)

The rules on domiciles are also unclear, is it 6 months or 3 months living in France, they have not yet decided, then what happens if you leave for a day, is the time clock reset? What if the employee is away, but their family are living in France, does that count?

The rate by which the employee and employer liability is set is still shrouded in mystery. Obviously the amount of salary the crew member is paid is one determining factor, but also is the size of the vessel, the trade in which it is employed, the rank of the employee, but unlike Spain, Malta and the UK any employer will not simply be able to apply a percentage rule, what we were advised was we have to send Enim all the relevant details, so that the Enim can carry out a trial calculation and then they will advise what they require paying. How they calculate this will be solely down to them and so basically you pay what they tell you to pay.

Who is responsible for paying this social Insurance? Well according to the French Government the Manager of the vessel and the employer. When asked what would happen if they did not pay, as in the case of Guernsey, being outside the EU and clearly no legal requirement to pay a foreign tax, there was no real response, except to say the mariner would not be entered into the system, without an employer's contribution, unlike other systems such as the UK

The question of private insurance schemes that meet MLC requirements was raised and the whether the French would accept these in lieu of a State sponsored scheme was asked. They could not answer and they would revert on that at a later stage.

Contributions, both employee and employer, are required to be paid by the 25th of each month day following the month of employment.

If the crew are employed by a non-French company, Enim will require either a 12-month bank guarantee of payments for each employee or 6 months advanced payment to them.

Clearly, there still are too many answers waiting to be told, yet the French are attempting to bring this system live in just 6 weeks. Here at Bachmann, we are working hard to give our clients alternatives. We have for many years been contributing to the UK and Maltese systems and we continue to work with other jurisdictions including our own here in Guernsey.

The comment that struck me the most came from one Captain frustrated by the issue of him facing significant contributions into a system without the knowledge that when he retires he will get his money back, was "remember yachts are mobile", clearly an implied threat that vessels will move to other locations.

We will continue to keep you updated as and when we know more. If you have any questions you would like to ask, please contact Nick Saul